Build a funding plan before you apply

1. Match the product to the cash cycle

Write a one-sentence use of funds: “We need $___ on ___ to pay for ___, and expect cash from ___ by ___.” Then list what could delay that cash. Inventory, a new employee and an unpaid invoice have different repayment risks even when they need the same dollar amount.

2. Compare borrowing with purchasing

Can the payment fit your cash flow?

Illustrative values are prefilled. Replace them with cash actually collected and paid, not invoiced sales or accounting profit. Inputs stay in this page and are not submitted as a funding application.

Monthly averages use 52 weekly or 260 business-day payments per year. Actual debit dates, bank holidays, seasonality, variable costs and draw timing can change the result. This assumes constant operating outflows under stress and excludes new borrowing from receipts. A positive monthly balance does not prove you can meet every debit or qualify for financing. Build a weekly cash calendar before signing.

13-week cash planner

Replace the illustrative numbers with your collection dates and payment schedule. Include payroll, tax, suppliers and owner draws in operating outflows; put all existing and proposed debt payments in the separate debt column. Financing proceeds are separate from sales receipts. Values stay in this page and disappear when you reload. Download a copy to keep your work.

The stress case delays all receipts by the chosen whole weeks and reduces them by the entered percentage. Operating costs, debt payments and financing proceeds stay on their original schedule. Loan proceeds must be approved and available to count as cash. Weekly closing balances can still hide an intraweek shortfall: check actual daily debit dates, restricted cash and bank availability. This is an arithmetic scenario, not an approval, accounting forecast or maximum safe borrowing recommendation.

3. Build a 13-week cash calendar

For each week, record opening available cash, customer receipts you reasonably expect to collect, payroll, suppliers, rent, taxes, owner draws, existing debt and proposed new payments. Closing cash becomes the next opening balance. Put payments on their actual dates; do not spread a monthly receipt across every day. Run a second version with late collections and weaker sales. Set a minimum operating reserve before deciding what payment is affordable.

If the stress case needs another loan merely to make the first loan’s payments, revisit the amount, project timing and operating plan. Ask whether a smaller purchase, customer deposit or negotiated supplier schedule can address the same need. Those alternatives have their own costs and constraints, but belong in the comparison.

4. Request an offer you can actually compare

1. Net cash deposited after every withheld fee, with the funding date and conditions.
2. Total scheduled repayment, payment amount and frequency, first debit date, and any recurring fee.
3. The named lender or receivables purchaser, broker compensation if applicable, and who services the account.
4. Personal liability, collateral, lien scope, existing-debt restrictions and default triggers.
5. A written payoff quote for your expected early-exit date, including fees that do not disappear.
6. For sales-based financing: reconciliation eligibility, how to request adjustments, required records and treatment of slow sales.
7. Who receives the application, when personal or business credit is checked, and which reporting organizations receive payment history.

A factor rate, monthly percentage and annual percentage rate are different measures. Use the same funding amount and timing when comparing offers, and keep the lender’s disclosure beside your model. “No prepayment penalty” does not by itself tell you how much unpaid interest or fixed cost is forgiven.

5. Prepare the evidence once

Assemble current bank statements, a profit-and-loss statement, balance sheet, receivables and payables aging, existing-debt schedule and a clear use-of-funds explanation. The provider decides the actual documents required. Reconcile transfers and loan proceeds so they are not mistaken for operating revenue. Save the terms and consent language you reviewed with a date. Protect sensitive documents and use the provider’s verified upload channel.

For larger requests, ask who has authority to sign, whether all owners must participate, which entity borrows and which assets secure the facility. Compare covenants and reporting obligations as well as price. A product can clear the published credit minimum and still be unsuitable for your business.

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